BMW Financial Services - Voluntary Termination/Excess Mileage

16th October 2017, 11:43:AM

Hello all! Just joined the forum after finding some very useful information courtesy of everyone here at LegalBeagles.

Back in July 2017, I chose to voluntarily terminate my PCP agreement with BMW Financial Services. I was about to venture into the world of home ownership with my first mortgage, and as such, I needed to get myself out of my agreement with immediate effect. I did some research into voluntary termination, and since I'd paid around £3,000 over the 50% mark, it seemed like the best route. Unfortunately, I had exceeded the mileage in my original PCP agreement. My PCP allowed for 9,000 miles per annum, and by the 3 year mark I'd reached a total of 45,000 miles - a total excess of 18,000 miles. My online research had prepared me for the possibility that BMW Financial Services might try and charge me for this excess mileage - I am very aware of my rights in law under the CCA, and as such I was prepared to dispute any potential claims made by BMW Financial Services. Surprise surprise, about 3 weeks after all was said and done (car collected and returned etc.), BMW Financial Services sent me an invoice for excess mileage charges (totalling approx. £2,100) along with a nice long letter full of waffle about why/how they are entitled to charge me for this under the CCA along with a scanned copy of my original financial agreement/contract document with them.

Needless to say, I chose to dispute their claim as per the advice I read online here at LegalBeagles. Here are the steps that I've followed so far:
- Completed BMW Financial Services official complaint process, including escalation stage 2. They, of course, rejected my complaint, claiming that I still owe them.
- Raised a formal complaint to the Financial Ombudsman, also including escalation to stage 2 (official review by an Ombudsman). Stupidly, they found in favour of BMW Financial Services, stating that this was because they "do not consider legislation when making their judgement" and only make an assessment based on what they believe to be "fair and reasonable" (I was aware based on articles I'd read online at LegalBeagles that the Financial Ombudsman were unlikely to find in my favour, but I thought it was worth a go). I, of course, chose to reject their decision.

So where are we now? There hasn't been a great deal of chasing on BMW Financial Services part in truth. I've received the following from them:
- A letter stating that my account with them is in arrears and that I must pay immediately or I "risk" further action being taken
- A couple of phone calls from them asking me whether or not I was aware of the charges outstanding, and whether or not I'd like to make payment over the phone
- A statement of my account, showing as still open with the balance of £2,100 pending

Up until recently, I'd pretty much left it be and ignored any contact from BMW Financial Services, but the statement of my account that I received recently prompted me to check whether or not all this fighting had impacted my credit rating at all. Normally I use ClearScore to regularly keep track of my credit file, though I decided on this occasion to get a separate opinion from Experian. What I found made me pretty angry to say the least. BMW Financial Services have marked the account as being voluntary terminated as of 01/07/2017, and updated the balance to show an outstanding amount of £2,100 (as I expected). What I didn't expect, however, is for them to claim that I have missed the last 2 monthly payments. They have added an entry for each month since my voluntary termination saying "missed/late repayment", despite there being no monthly fee to be paid. Interestingly, rather than applying the standard CAIS codes to each of these missed payments (e.g. code 1 for the first month missed, code 2 for the second), each entry shows as having a CAIS code of 0, which is applied where a balance is cleared/satisfied on or before the requested payment date - in other words, this code is applied to normal successful payments.

The above has had a significant impact on my credit score - it's dropped from around the 970 mark, to the low 600s, taking it into the 'Poor' category. Unsurprisingly, I'm pretty furious about this. So I'm here to ask for some advice r.e. getting my credit file amended and continuing my fight. BMW Financial Services should have marked my account with them as closed/satisfied the moment I chose to voluntary terminate, so keeping this open and effectively 'amending' the balance to try and claim that excess mileage is owed is without doubt entirely illegal, as are the additions to my credit file. I have written to them explaining my reasoning, asking them to amend my credit file accordingly, though they have responded with a refusal to do so. It is on this basis I would like to ask for some advice on:
- How to go about getting my credit file legally amended
- How to get BMW Financial Services to close the account as they should have done initially

I'm very much hoping that court isn't going to be the only solution here, as I'd hate for it to have to go that far, though I do appreciate that this is a realistic possibility at this point.

Some points to add:
- I notified BMW Financial Services about my wishing to voluntary terminate in accordance with the advice I read here at LegalBeagles. I wrote to them, stating clearly what I was doing and the date from which it would take effect.
- The car was reviewed by two BCA inspectors upon collection, both of whom confirmed the car to be in an excellent condition with no damages/marks to note (I have signed copies of paperwork documenting this). BMW Financial Services have not attempted to argue that the car has suffered excessive 'wear and tear' as a direct result of the higher mileage

Thanks in advance for all your help. I'll do my best to answer any questions you may have!

Court is generally the way to go for this, or the alternative is to make a section 42 request under the Data Protection Act to the ICO.

I've attached an example letter, though it is quick and doesn't relate to your circumstances so you would need to adapt it to suit your needs. You can post it to the ICO or you can email the letter to them at casework@ico.org.uk

The amount on the statement of account to me would suggest that is the outstanding credit balance that needs to be paid, yet despite this they have acknowledged that the agreement was VT'd and the excess mileage charges do not form part of the credit that was provided to you at the time of entering into the agreement rather they are an alleged debt for charges/fees. By implying missed/late payments on your credit file (especially when the charges are in dispute and BMW have refused to take the matter to court) gives the impression that the balance shown relates to the credit amount, when this in fact is untrue.

Never done a section 42 so not sure if it works, so the other option after that is a claim for damages for breach of the DPA.

DISCLAIMER: ANY CONTENT I POST IS INTENDED FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY AND IS NOT A REPLACEMENT OR SUBSTITUTION FOR LEGAL ADVICE. I MAKE NO REPRESENTATIONS AS TO THE ACCURACY OF MY POSTS NOR DO I ASSUME ANY RESPONSIBILITY. USE OF ANY CONTENT IS SOLELY AT YOUR OWN RISK AND COST AND I ACCEPT NO LIABILITY. YOU SHOULD SEEK INDEPENDENT LEGAL ADVICE BY GOING TOLaw Society's Find A Solicitor OR CONTACT YOUR LOCAL Citizen's Advice Bureau.

Comment

Court is generally the way to go for this, or the alternative is to make a section 42 request under the Data Protection Act to the ICO.

I've attached an example letter, though it is quick and doesn't relate to your circumstances so you would need to adapt it to suit your needs. You can post it to the ICO or you can email the letter to them at casework@ico.org.uk

The amount on the statement of account to me would suggest that is the outstanding credit balance that needs to be paid, yet despite this they have acknowledged that the agreement was VT'd and the excess mileage charges do not form part of the credit that was provided to you at the time of entering into the agreement rather they are an alleged debt for charges/fees. By implying missed/late payments on your credit file (especially when the charges are in dispute and BMW have refused to take the matter to court) gives the impression that the balance shown relates to the credit amount, when this in fact is untrue.

Never done a section 42 so not sure if it works, so the other option after that is a claim for damages for breach of the DPA.

Thank you R0b that's brilliant.

You're absolutely right - they have acknowledged that the agreement was VT'd, I even have this in writing. Their initial documentation surrounding the VT stated that I "might" be charged for excess mileage (as you would expect them to say) though nowhere did they attempt to claim that they would add this to my agreement as an outstanding balance. The recent account statement that I've received shows clearly that they've just slapped the excess mileage charge onto my account with them as soon as I started to contest it. It's almost as if they deliberately left the account open with the exact amount (spookily) that they believe I owe for excess mileage, because they're fully aware that they have no legal right to try and invoice for me it separately. Maybe by doing it this way they feel they're more likely to be successful in bullying me into paying the charge - claiming that the account has balances outstanding would be easier to argue than a separate excess mileage invoice.

As you rightly point out however, they've shot themselves in the foot by acknowledging the voluntary termination as this serves as their confirmation that the credit amount outstanding is cleared.

I'll look at your attachment and contact the ICO. I'll let you know how I get on.

Comment

If the VT letter suggests that liability is terminated and that your liability is zero, you should use that as part of your evidence to the ICO.

I recall sometime last year maybe that a person on here attempted to take on BMW where they reported a default on there, but received a response from their solicitors denying any breach. I think the letter scared that person off and nothing was heard since. If the ICO doesn't work then that may be your only option in order to resolve it.

I have had success with Santander in the past but they filed inaccurate data relating to collection charges. I did issue a claim and within a matter of a week, the issue was settled for £1,300 on the grounds that Santander did not want to incur further expense. Of course your scenario is different but given that they've accepted your VT and marked it on your credit report, that would imply that the agreement is indeed terminated. You might want to take a screenshot or print out your credit report as evidence.

DISCLAIMER: ANY CONTENT I POST IS INTENDED FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY AND IS NOT A REPLACEMENT OR SUBSTITUTION FOR LEGAL ADVICE. I MAKE NO REPRESENTATIONS AS TO THE ACCURACY OF MY POSTS NOR DO I ASSUME ANY RESPONSIBILITY. USE OF ANY CONTENT IS SOLELY AT YOUR OWN RISK AND COST AND I ACCEPT NO LIABILITY. YOU SHOULD SEEK INDEPENDENT LEGAL ADVICE BY GOING TOLaw Society's Find A Solicitor OR CONTACT YOUR LOCAL Citizen's Advice Bureau.

Comment

If the VT letter suggests that liability is terminated and that your liability is zero, you should use that as part of your evidence to the ICO.

I recall sometime last year maybe that a person on here attempted to take on BMW where they reported a default on there, but received a response from their solicitors denying any breach. I think the letter scared that person off and nothing was heard since. If the ICO doesn't work then that may be your only option in order to resolve it.

I have had success with Santander in the past but they filed inaccurate data relating to collection charges. I did issue a claim and within a matter of a week, the issue was settled for £1,300 on the grounds that Santander did not want to incur further expense. Of course your scenario is different but given that they've accepted your VT and marked it on your credit report, that would imply that the agreement is indeed terminated. You might want to take a screenshot or print out your credit report as evidence.

Just written the letter up and sent it over along with a bundle of evidence PDFs. I'll wait to hear back and see what happens! Thanks again for your advice R0b.

Comment

Just a quick update. I called the ICO on Monday of this week (23/10/2017) who informed me that they have received my email (containing my letter and associated attachments) and that it will soon be assigned to a case manager. They advised me to call back in a week or so, by which point it should have been assigned and they should be able to provide me with the case reference number.

Unfortunately though, they also informed me that there is a very large volume of cases being handled at present, resulting in the average waiting time being 3 months or more. Bit of a pain, as this means I'm likely to have to wait this length of time before there's any sign of a correction being applied to my credit file, but what can you do.

For anyone who requires it, please see attached a redacted copy of the letter that I sent to the ICO. I amended the template supplied by R0b to suit my situation specifically, so if you intend to use it, I suggest having a good read through it to ensure that the prose is accurate when used to describe your claim. Fill in the areas marked in brackets of course.

Comment

Thank you for the update, it is disappointing that it is possibly going to take a while, however I believe the ICO should notify BMW that you have made a s.42 request. They will of course have their own opportunity to put forward their evidence, or they might see it as a way to back down and remove the markers, who knows.

If a s.42 request fails, then of course legal proceedings will be your last resort.

Keep us updated.

DISCLAIMER: ANY CONTENT I POST IS INTENDED FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY AND IS NOT A REPLACEMENT OR SUBSTITUTION FOR LEGAL ADVICE. I MAKE NO REPRESENTATIONS AS TO THE ACCURACY OF MY POSTS NOR DO I ASSUME ANY RESPONSIBILITY. USE OF ANY CONTENT IS SOLELY AT YOUR OWN RISK AND COST AND I ACCEPT NO LIABILITY. YOU SHOULD SEEK INDEPENDENT LEGAL ADVICE BY GOING TOLaw Society's Find A Solicitor OR CONTACT YOUR LOCAL Citizen's Advice Bureau.

Comment

Thank you for the update, it is disappointing that it is possibly going to take a while, however I believe the ICO should notify BMW that you have made a s.42 request. They will of course have their own opportunity to put forward their evidence, or they might see it as a way to back down and remove the markers, who knows.

If a s.42 request fails, then of course legal proceedings will be your last resort.

Keep us updated.

Thanks R0b. Another quick update: I spoke with the ICO yesterday who were able to provide me with a case reference number - excellent. They reminded me of the possible 2 month delay, but I'm prepared for this of course. Conveniently, I also received a letter from the BMW Financial Services Recovery Department yesterday advising me that there are "still balances owed/outstanding on my account" and that if I do not pay within 14 days, they will add interest fees to the total owed and "may" pass my file over to a 3rd party for debt recovery.

I'm assuming that the word "may" is operative here, in that they have absolutely no legal right to pass my file to a 3rd party debt collection agency (as the matter hasn't gone through court, there's no CCJ). That being said, I am still in this position whereby they've left my credit account with them showing as open/unsatisfied. Could the default that they've filed be enough for a 3rd party debt collection agency to legally take action?

Comment

You might want to consider writing to BMW and notifying them that you have made a section 42 request to the ICO (which they have acknowledged and are investigating) concerning BMW unlawfully recording date and/or which is inaccurate and non-compliant with the ICO's Technical Guidance. You could suggest that they cease any further action whilst the investigations are ongoing and until the ICO's investigations have concluded.

As for debt collectors, well they can if they have a legitimate purpose and in this case they feel like they have but the only real way to get rid of that is to take matters to court, though it could amount to harassment if the court finds that BMW has been unlawfully pursuing this or they are in breach of the DPA.

DISCLAIMER: ANY CONTENT I POST IS INTENDED FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY AND IS NOT A REPLACEMENT OR SUBSTITUTION FOR LEGAL ADVICE. I MAKE NO REPRESENTATIONS AS TO THE ACCURACY OF MY POSTS NOR DO I ASSUME ANY RESPONSIBILITY. USE OF ANY CONTENT IS SOLELY AT YOUR OWN RISK AND COST AND I ACCEPT NO LIABILITY. YOU SHOULD SEEK INDEPENDENT LEGAL ADVICE BY GOING TOLaw Society's Find A Solicitor OR CONTACT YOUR LOCAL Citizen's Advice Bureau.

Comment

You might want to consider writing to BMW and notifying them that you have made a section 42 request to the ICO (which they have acknowledged and are investigating) concerning BMW unlawfully recording date and/or which is inaccurate and non-compliant with the ICO's Technical Guidance. You could suggest that they cease any further action whilst the investigations are ongoing and until the ICO's investigations have concluded.

As for debt collectors, well they can if they have a legitimate purpose and in this case they feel like they have but the only real way to get rid of that is to take matters to court, though it could amount to harassment if the court finds that BMW has been unlawfully pursuing this or they are in breach of the DPA.

Apologies, I forgot to add that I wrote to BMW Financial Services yesterday in response to the letter from their Recovery department. Exactly as you've just advised, I informed them that I have raised an investigation request with the ICO, providing them with the case number accordingly. I closed my letter strongly urging them to either make the necessary amendments to my credit file in order to avoid legal proceedings. I have legal cover through my home insurance, and if need be I am prepared to take them to court.

I am aware that BMW Financial Services feel they a legitimate reason, but the fact is, they don't legally. Can a debt recovery agency really start sending people round to my door without a CCJ or some sort of court order? Or will they just start sending me threatening letters? Surely this isn't at all legal?

Is this just BMW Financial Services saying "we can't be bothered to chase you anymore, so we'll get someone else to send you letters instead"?

My ex-partner had a credit card with something like £200 owing on it, and this was basically entirely interest. Realistically, she was duped into signing up for some crazy high-interest rate card as she was desperate for it at the time. She maintained she'd been duped, and continually refused to pay. She'd get near enough a letter a week from a 3rd party debt recovery agency demanding that she pays, but never once did they visit her trying to recover assets.

Comment

It's unlikely they will start knocking at your door rather a third party debt collector may try to send you letters / call you to recover the alleged debt. This is of course the crux of the argument where on the one hand you feel there is no legitimate reason and on the other, BMW feel there is (but they refuse to pursue the matter through the courts). If someone did in fact come to your door then your well within your rights to revoke their right to come onto your property, and claim trespass if they do but maybe that's just getting too far ahead of ourselves and I don't think they would go down this route.

It would be more likely that a bailiff would attend your premises following a judgment against you but BMW would need to issue legal proceedings and win before that could be done.

I wouldn't worry too much just yet about it could just be BMW's debt collection arm or some low level debt collection agency which has no power at all.

Have you inquired with your legal expenses cover to see if they will take it on or at least get some advice?

DISCLAIMER: ANY CONTENT I POST IS INTENDED FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY AND IS NOT A REPLACEMENT OR SUBSTITUTION FOR LEGAL ADVICE. I MAKE NO REPRESENTATIONS AS TO THE ACCURACY OF MY POSTS NOR DO I ASSUME ANY RESPONSIBILITY. USE OF ANY CONTENT IS SOLELY AT YOUR OWN RISK AND COST AND I ACCEPT NO LIABILITY. YOU SHOULD SEEK INDEPENDENT LEGAL ADVICE BY GOING TOLaw Society's Find A Solicitor OR CONTACT YOUR LOCAL Citizen's Advice Bureau.

Comment

It's unlikely they will start knocking at your door rather a third party debt collector may try to send you letters / call you to recover the alleged debt. This is of course the crux of the argument where on the one hand you feel there is no legitimate reason and on the other, BMW feel there is (but they refuse to pursue the matter through the courts). If someone did in fact come to your door then your well within your rights to revoke their right to come onto your property, and claim trespass if they do but maybe that's just getting too far ahead of ourselves and I don't think they would go down this route.

It would be more likely that a bailiff would attend your premises following a judgment against you but BMW would need to issue legal proceedings and win before that could be done.

I wouldn't worry too much just yet about it could just be BMW's debt collection arm or some low level debt collection agency which has no power at all.

Have you inquired with your legal expenses cover to see if they will take it on or at least get some advice?

Thanks R0b, that makes me feel a little more comfortable. Understandably, I've never been in this position before. Before all this my credit rating was near enough perfect. Needless to say, it is worrying, but that's exactly how BMW Financial Services want me to feel, in an attempt to bully me into paying a charge that simply isn't owed. Frankly, it's disgusting.

I spoke with my home insurance provider, and they confirmed that they offer legal cover for any disputes relating to financial disagreements surrounding the purchase of a motor vehicle. I explained my situation, and they confirmed that I'd be covered - both if BMW Financial Services were to attempt to take legal action against me, and if I chose to take legal action against them.

Comment

If it is causing some distress then there is always the option to send a 'without prejudice' letter (which means a court has no right to see the letter and is private between you and BMW) to offer some form of lower settlement (perhaps start at 30%) on the condition that any settlement is (1) made without admission of liability and (2) that BMW undertake to remove all adverse entries reported to credit reference agencies and mark the account as 'settled'.

Or you could continue to stand your ground and see what the ICO comes up with and decide from there.

DISCLAIMER: ANY CONTENT I POST IS INTENDED FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY AND IS NOT A REPLACEMENT OR SUBSTITUTION FOR LEGAL ADVICE. I MAKE NO REPRESENTATIONS AS TO THE ACCURACY OF MY POSTS NOR DO I ASSUME ANY RESPONSIBILITY. USE OF ANY CONTENT IS SOLELY AT YOUR OWN RISK AND COST AND I ACCEPT NO LIABILITY. YOU SHOULD SEEK INDEPENDENT LEGAL ADVICE BY GOING TOLaw Society's Find A Solicitor OR CONTACT YOUR LOCAL Citizen's Advice Bureau.

Comment

If it is causing some distress then there is always the option to send a 'without prejudice' letter (which means a court has no right to see the letter and is private between you and BMW) to offer some form of lower settlement (perhaps start at 30%) on the condition that any settlement is (1) made without admission of liability and (2) that BMW undertake to remove all adverse entries reported to credit reference agencies and mark the account as 'settled'.

Or you could continue to stand your ground and see what the ICO comes up with and decide from there.

Thanks R0b. I think at this stage I'll wait to see what the ICO come back with. I don't intend to back down.